* Palladium reaches $617.50
* Robust physical demand supports gold prices
* Market expectations of more QE as early as November
(Updates prices, adds comment)
By Rebekah Curtis
LONDON, Oct 25 (Reuters) - Gold rose about 1 percent on
Monday and palladium hit its highest in nearly a decade, as the
dollar fell after weekend comments at the G20 meeting and
investors awaited a speech by the Federal Reserve Chairman.
Spot palladium <XPD=> rose to $617.50, its highest since
mid-2001, from $586.98 an ounce late in New York on Friday. The
metal, mainly used in auto-catalysts to cut emissions, traded at
$606.30 an ounce at 1414 GMT.
Spot gold <XAU=> rose to $1,337.17 an ounce, off the 2-1/2
week low of $1,315.09 hit last Friday. It was at $1,326.70 late
in New York on Friday.
Analysts said the Group of 20 (G20) finance ministers on
Saturday pointed to a status quo in currency markets, with the
dollar staying pressured due to market expectations for the
Federal Reserve to unveil a second round of quantitative easing
as early as November. []
"It's a very bullish picture for gold," said Carl Firman,
analyst at Virtual Metals.
"You have this prospective QE2, dollar weakness, inflation
fears," he added. "After Christmas we're looking at possibly
$1,400."
The dollar fell around 0.7 percent versus a major currency
basket which made the dollar-priced metal, a hedge against risk,
cheaper for non-U.S. investors. The U.S. gold futures for
December delivery <GCZ0> rose 1.37 percent to $1,343.1 an ounce.
"The differences still persist between countries as to what
consitutes proper monetary and currency policy," Commerzbank
analyst Daniel Briesemann said. "That means tensions between
different governments will continue and therefore gold should
stay in demand among investors."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on on QE2 impact on gold and dollar:
http://graphics.thomsonreuters.com/F/10/GLD_IRDLR1010.gif
Graphic on commodity price performances in 2010:
http://graphics.thomsonreuters.com/F/10/CMD_PF.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
ROBUST PHYSICAL DEMAND
Robust physical demand from India ahead of its important
festival season, as well as from other countries, is likely to
keep gold prices buoyant. []
Concerns about the recovery of the global economy and
inflation due to lax monetary policies have made gold a popular
investment, pushing the precious metal up by a fifth this year,
outpacing copper's 16 percent gain.
BlackRock Inc <BLK.N>, the world's largest money manager,
expected gold prices to rise further due to a lack of world
production growth, increasing appetite among central banks to
hold more gold as a safe-haven investment. []
Silver <XAG=> was at $23.67 an ounce from $23.24 an ounce
and platinum <XPT=> was at $1,693.17 an ounce from $1,667.75 an
ounce.
"It's more or less a dollar story, but it could be
sustainable," said Deutsche Bank trader Michael Blumenroth.
"There's still a lot of reasons to be long gold --
quantitative easing and the inflation that will come sooner or
later."
Metal Prices at 1434 GMT
Metal Last Change Pct Move End 2009 Ytd Pct
move
#VALUE!
LME Alum 2390.00 25.00 +1.06 2230.00 7.17
LME Cu 8500.00 165.00 +1.98 7375.00 15.25
LME Lead 0.00 -2530.00 -100.00 2432.00 -100.00
LME Nickel 23675.00 450.00 +1.94 18525.00 27.80
LME Tin 26800.00 400.00 +1.52 16950.00 58.11
LME Zinc 2580.00 68.00 +2.71 2560.00 0.78
SHFE Alu 16775.00 225.00 +1.36 17160.00 -2.24
SHFE Cu* 64610.00 1820.00 +2.90 59900.00 7.86
SHFE Zin 20950.00 680.00 +3.35 21195.00 -1.16
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Editing by Sue Thomas)
